Supporting the Bold Entrepreneur – BW Businessworld

Over the past two decades, as entrepreneurs raced to solve the world’s most relevant problems by leveraging technology, they have been hailed, widely recognized and adored by the masses. While some rose to prominence and perished during market downturns, others nibbled away at the mountain of problems that plagued humanity. Their sheer audacity to tackle massive issues despite being a blow in the grand scheme of things needed support. And that’s where venture capitalists like Chiratae Ventures stepped in to give entrepreneurship the wings it so badly needed.

Over its 16-year history, Chiratae Ventures has funded a wide range of early-stage startups and seen them reach tremendous heights over time. With big names like Flipkart, Myntra, FirstCry and Poilcybazaar in its portfolio, Chiratae Ventures has “been there and done it” through multiple market declines. “This is my fifth so-called ‘down cycle’. And every time we just put our heads together on the ground, worked hard with our businesses. We always found our entrepreneurs to be very mature,” says Sudhir Sethi, Founder and Chairman, Chiratae Ventures.

With the current downturn affecting global markets, venture capitalists have suddenly tightened the funding tap, and startups that have had significant funding in the past two years all of a sudden have had to think about their tracks. But Chiratae likes to keep her outlook positive.

“We don’t expect startups to have major problems. But companies need to focus on making their business profitable and spend their money prudently now,” says TCM Sundaram, Founder and Vice President of Chiratae Ventures. “These cycles keep happening in terms of funding,” he adds.

Lenskart, the eponymous eyewear giant, received support from Chiratae when it needed it most in its early days. Twelve years have passed since then, and Chiratae continues to have faith in the business that has now grown to boast a $4.5 billion valuation.

But why would Chiratae have made such a strong bet from the start? “We support bold entrepreneurs,” says Sudhir Sethi. “We are looking for phenomenal entrepreneurs who think big, nationally and globally, for business. These entrepreneurs build a team culture and an organization that stands out,” he says.

India’s Decade in SaaS

The star child of India’s SaaS ecosystem, Girish Mathrubootham (Founder and CEO of Freshworks) recently touted this decade as India’s as a product nation. Tailwinds have propelled SaaS businesses in India as the world has turned to software innovation to drive digital transformation since the onset of the Covid-19 pandemic. In fact, 2021 has proven to be a watershed year for Indian SaaS companies which have seen a huge increase in their valuations, venture capital investments, number of unicorns and even IPOs.

This success story was crafted by visionary ecosystem founders and a healthy mass of engineering and product teams that India has been spawning in the tech sector for decades. With an abundant talent pool and the current pace of growth, India’s SaaS segment is now expected to reach the $100 billion revenue milestone by 2026. This means that India will soon overtake China to become the second-largest largest SaaS country in the world.

A healthy stream of SaaS companies are going global even with their ambitions and quality products. While Freshworks and Zoho are leading this movement, Chiratae’s portfolio companies such as Uniphore and Pixis also hold great promise. “There are more and more entrepreneurs looking for SaaS opportunities starting from India and going into global markets. There is a lot of strong validation for many Indian companies proving their mettle in the products and go-to-market (GTM) for global markets,” said Venkatesh Peddi, MD and Head of SaaS/Cloud, Chiratae Ventures.

Having been at the center of this growth with more than 40 SaaS companies in its portfolio, Chiratae Ventures is quite optimistic about the prospects for this segment, even as the global slowdown continues to affect the broader tech ecosystem. And Peddi, like Mathrubootham, believes that tough market conditions are good for attracting quality talent at the right price in SaaS. “While we should be talking about current challenges, of course, one piece of good news that founders of SaaS startups would agree with me on is that current conditions are optimal for attracting the right talent at the right price, which has been swollen in the last couple of years,” says Peddi.

Speaking on the future of Indian SaaS companies, Peddi said the segment will be valued at over $1 trillion in the near future. This may well prove true despite current market conditions, as the Indian SaaS segment surpassed $8 billion in revenue last year alone, growing at a CAGR of 55%.

The rise of consumer technology

Consumer behavior has changed dramatically with the growth of the internet economy, as the barriers between technology, media, internet and commerce have come down. It also allows creators to get closer to the consumer like never before. And as a broad industry that encompasses commerce, marketplaces, gaming, social media, edtech, and more, consumer technology offers a lot of opportunities.

These consumer technology opportunities are underpinned by a 25% annual growth in the Internet user base and a projected 65% penetration of smartphones in Indian homes by 2025. The industry is poised to hit 200 to $250 billion over the next three years. .

Chiratae Ventures was one of the first to identify the potential of the consumer technology segment, having invested nearly 45-48% of all invested capital over the past 16 years under this large umbrella. It also means that the venture capital firm has had a huge role to play in the growth story of India’s startup ecosystem, which includes its portfolio companies such as Flipkart, Lenskart, Myntra, Manthan, FirstCry, Policybazaar, Newgen, PlaySimple and Xpressbees.

“Team Chiratae have been wonderful partners for us since our Serie B days in 2012. It has been an exceptional relationship with Sudhir and the Chiratae family. We really appreciate the constant support that FirstCry as an organization has received from him and the Chiratae team,” said Supam Maheshwari, Co-Founder and CEO of FirstCry.

“We fueled the first wave of startups in India and are now eyeing e-commerce 2.0,” says Anoop Menon, Chief Investment Officer, Chiratae Ventures. “Now we are here with a new set of companies, which in the next 18 to 24 months will enter the unicorn club,” he says.

With a huge population of 1.4 billion people, the country has many problems, which translates into many opportunities for entrepreneurs and startups. The consumer technology industry is uniquely positioned to generate cross-industry experiences located outside of core technology businesses. Startups in this broad segment can address the problems and aspirations of India today. “If an entrepreneur can identify the right set of problem statements and show interest in digging into that, they will find Chiratae to be the right partner to take at least the first steps in the journey from seed to Series A,” said Menon.

Paradigm shift in health care

The Covid-19 pandemic was a huge eye opener, even for developed countries, as health systems were overwhelmed due to massive patient numbers. The shortcomings of the system were exposed, when it was previously assumed that they did not exist. But the huge influx of technology in healthcare has forever changed the face of healthcare delivery, especially as telemedicine has finally gained popularity.

While telemedicine already existed before the Covid-19 epidemic, its increased adoption by the medical community has stood out today. This has given telemedicine a permanent place in health care delivery as the focus shifts to preventive care.

People are focusing more than ever on online healthcare research, i.e. the discovery element, which has grown exponentially over the past couple of years. This presents some opportunities for entrepreneurs in the health technology segment, but healthcare delivery is still offline-focused. “But you know, there’s a layer in the middle of those two, which has to do with care management — has to do with handling the patient throughout a treatment protocol. And I think that stack is where we’ll see the traction moving forward,” shares Ranjith Menon, MD, Chiratae Ventures.

The managed care that Menon talks about begins when a patient is discharged from a delivery system like a hospital or clinic. Once outside of a doctor’s jurisdiction, patients often find it difficult to stick to a prescribed medical regimen, diet, and lifestyle. In such a scenario, healthcare management can help healthcare organizations significantly reduce costs while improving efficiency and quality of care.

According to Precedence Research, the global health management market was valued at approximately $34.44 billion in 2021 and is expected to reach $184.51 billion by 2030.

For a country of over a billion people, health care must be accessible. A positive step towards achieving this goal will come from the establishment of healthcare management systems stemming from innovation in the country’s healthcare technology segment. This would significantly improve patient outcomes in medical centers and clinics by providing them with better disease management, reducing inpatient stay and total physician shadowing hours. Health tech startups could lean into this space to improve the nation’s health care.

Support the entrepreneurial spirit

Over the past decade, India has truly become a land of opportunity with the success of startups paving the way for more entrepreneurs. And with the backing of VCs like Chiratae Ventures, the startup ecosystem is finally getting the much-needed fuel to sustain its long-term growth.

“Over the past 15+ years, Chiratae has become a leading venture capital firm in India. Chiratae has delivered eight unicorns with three IPOs, having invested in 125 tech startups to date. I want to commend Sudhir and his team for delivering consistent and outsized returns to investors, nurturing stellar founders over the long term, adding value, and providing board support to the portfolios,” said Ratan Tata, Senior Advisor, Chiratae Global Advisory Board.

As India’s startup journey continues despite the current market downturn, it will be interesting to see the support it attracts from domestic and international investors. One thing is certain – the bold entrepreneur will always have the backing of a VC through the many dips and ridges in the market.